HOUSTON, Apr. 23 -- Woodside Petroleum Ltd., Perth, Australia, Monday announced a foreign investment law prohibits Shell Australia Investments Ltd. and Shell Australia Ltd. from acquiring additional shares in Woodside.
Australia's federal treasury office said the Foreign Acquisition & Takeovers Act of 1975 blocks Shell from implementing its $2.5 billion offer for 56% interest of Woodside Petroleum.
Shell and Woodside are joint venturers in the North West Shelf project in which Woodside is the operator. Analysts had said the Shell proposal was part of a larger strategy for parent Royal Dutch/Shell Group to gain a greater share of the world's liquefied natural gas market.
Woodside plans to meet with Shell to discuss Woodside's options. Meanwhile, Woodside has been seeking alternative proposals just in case the Shell offer was not finalized and other parties have said they would seriously considering submitting proposals.
Any future proposal probably will be in the form of an asset transfer or merger proposal rather than a takeover bid, Woodside Petroleum said, adding such an offer would require shareholder approval.
Australian Minister for Industry, Science and Resources Sen. Nick Minchin said, "The treasurer's decision will protect Australia's national interest and ensure that Woodside remains committed to developing our oil and gas resources.
"It reflects the unique position of Woodside in Australia's petroleum industry and in particular, the company's key role as operator of Australia's largest ever resource project, the North West Shelf Joint Venture.
Minchin said, "At the same time, I would like to send a clear message that the government continues to welcome foreign investment in Australia. In particular, the government recognizes the major role such investment, including that by Shell, has played in the development of Australia's resources sector."